Is Connecticut the First Domino in a Higher National Minimum Wage? Not So Fast.

Everything you need to know about the state’s minimum-wage hike.

NEW YORK, NY - NOVEMBER 22: A waiter clears a table at a midtown restaurant popular for business lunches on November 22, 2011 in New York City. As retailers prepare for the start of the traditional holiday shopping season, the Commerce Department revised third-quarter GDP downward to 2 percent from 2.5 percent Tuesday for the quarter that ended on September 3. While economists are not expecting the country to slip back into a recession, many analysts will be closely watching consumers in the coming month for evidence on the overall health of the economy. 
National Journal
Emma Roller
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Emma Roller
March 27, 2014, 4:20 p.m.

On Thursday night, Con­necti­c­ut be­came the first state in the coun­try to raise its min­im­um wage to $10.10 an hour — the wage Pres­id­ent Obama en­vi­sioned in his State of the Uni­on ad­dress as be­com­ing the new na­tion­al stand­ard.

Con­necti­c­ut Gov. Dan­nel Mal­loy — who’s up for reelec­tion this year — has been push­ing hard for the meas­ure. Thursday night, Mal­loy signed the bill in­to law at the same res­taur­ant he vis­ited with Obama and oth­er New Eng­land gov­ernors to pro­mote the law a month ago.

Though su­per­lat­ive, the Con­necti­c­ut law isn’t as ex­treme as it may seem — it will raise the min­im­um wage to $10.10 on Jan. 1, 2017, with in­cre­ment­al in­creases over the next three years. Con­necti­c­ut’s min­im­um wage is cur­rently $8.70.

While no oth­er state meas­ures up to Con­necti­c­ut, some cit­ies do. San Fran­cisco’s min­im­um wage, for ex­ample, is cur­rently $10.74. As a state, Cali­for­nia plans to in­crease its min­im­um wage to $10 by 2016. All told, 23 states and the Dis­trict of Columbia now have a min­im­um wage high­er than the fed­er­al rate. But those state wages are un­likely to go any high­er, ab­sent a fed­er­al raise.

The Con­necti­c­ut law plays in­to a na­tion­wide agenda set by the Obama ad­min­is­tra­tion to raise the min­im­um wage. Both Obama and Vice Pres­id­ent Joe Biden have been cam­paign­ing for bet­ter work­er con­di­tions, vis­it­ing wage-rais­ing busi­nesses like Costco, the Gap, and the Flor­ida Av­en­ue Grill in D.C. (Costco is, co­in­cid­ent­ally, a big Demo­crat­ic donor.)

“I sup­port these ef­forts, and I com­mend Gov­ernor Mal­loy for his lead­er­ship,” Obama said in a state­ment. “But to truly make sure our eco­nomy re­wards the hard work of every Amer­ic­an, Con­gress must act. I hope mem­bers of Con­gress, gov­ernors, state le­gis­lat­ors, and busi­ness lead­ers across our coun­try will fol­low Con­necti­c­ut’s lead to help en­sure that no Amer­ic­an who works full-time has to raise a fam­ily in poverty, and that every Amer­ic­an who works hard has the chance to get ahead.”

Obama and Demo­crats in Con­gress want to raise the fed­er­al min­im­um wage from $7.25 to $10.10. Min­im­um-wage work­ers have not seen a fed­er­al raise since 2009, des­pite grow­ing in­fla­tion and a limp­ing eco­nomy.

But con­ser­vat­ives say rais­ing the min­im­um wage will hurt busi­nesses and pre­vent them from hir­ing more em­ploy­ees. Budget num­ber-crunch­ers have said that al­though a high­er fed­er­al wage would help some low-wage fam­il­ies rise above the poverty line, the share of low-wage work­ers with jobs would also slightly de­crease.

Ac­cord­ing to a re­port by the Con­gres­sion­al Budget Of­fice that has been seized upon by Re­pub­lic­ans, rais­ing the fed­er­al min­im­um wage to $10.10 an hour would re­duce total em­ploy­ment by 500,000 jobs. But it would also mean roughly 16.5 mil­lion low-wage work­ers would have high­er earn­ings.

Eco­nom­ists say rais­ing the wage would ac­tu­ally stim­u­late the eco­nomy. That’s be­cause, more than any oth­er group, low-wage work­ers are more likely to spend their ex­tra earn­ings. While high-in­come earners can af­ford to squir­rel away their in­come for years, low-wage work­ers in­ject their money back in­to the eco­nomy dir­ectly to pay for ba­sic goods and ser­vices.

This is the second time in two years that Con­necti­c­ut has voted to raise its min­im­um wage. Still, in a re­cent Quin­nipi­ac Uni­versity poll, 71 per­cent of Con­necti­c­ut voters said they sup­por­ted rais­ing the min­im­um wage yet again. A Bloomberg poll found that 69 per­cent of Amer­ic­ans na­tion­wide sup­port rais­ing the wage to $10.10 over the next three years.

But the meas­ure is un­likely to pass at the fed­er­al level, due to op­pos­i­tion from House GOP mem­bers. Back in Janu­ary, Speak­er John Boehner balked at Obama’s de­cision to raise fed­er­al con­tract­ors’ wages to $10.10 an hour. “The ques­tion is how many people, Mr. Pres­id­ent, will this ex­ec­ut­ive ac­tion ac­tu­ally help?” Boehner told re­port­ers. “I sus­pect the an­swer is close to zero.”

Some Con­necti­c­ut work­ers prob­ably wish their new state law would come in­to ef­fect earli­er than 2017. But for the ma­jor­ity of oth­er states, passing a min­im­um wage above $10 is a lofty goal in it­self. The Amer­ic­an Le­gis­lat­ive Ex­change Coun­cil dis­trib­utes a le­gis­lat­ive agenda to con­ser­vat­ive state law­makers na­tion­wide, which makes their ac­tions a good ba­ro­met­er for the fu­ture of the min­im­um wage in red Amer­ica.

Since 2011, ALEC-backed law­makers in 25 states in­tro­duced 67 bills to re­duce the min­im­um wage or weak­en over­time pro­tec­tion for work­ers. El­ev­en of those bills even­tu­ally be­came law. So Re­pub­lic­an state law­makers — who con­trol 26 state­houses in the coun­try — are not keen on passing a min­im­um-wage hike.

Just as Col­or­ado and Wash­ing­ton have been the guinea pigs for leg­al­ized marijuana, Con­necti­c­ut will be a guinea pig to see how a high­er min­im­um wage will af­fect busi­ness in the state. And while oth­er states aren’t ex­actly clam­ber­ing to fol­low Col­or­ado’s lead and leg­al­ize marijuana, gov­ernors can also see the state’s eco­nomy hasn’t ex­actly gone to hell, either.

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